Lake Frome Joint Venture, South Australia

The Company's key Lake Frome Joint Venture covers 2000 square kilometres located adjacent to the operating Beverley in-situ leach uranium mine in South Australia.  The mine owner, Heathgate Resources Pty Ltd ("Heathgate"), an affiliate of the US utility General Atomic, is the holder of one of the few export licences for uranium in Australia and manages a joint venture over Giralia's tenements under which Heathgate can confirm a 75% interest by meeting all expenditure up to a decision to mine, with Giralia free carried at 25%.

In what is now shaping as one of Australia's major uranium districts, Heathgate has previously intersected extensive ore grade uranium in direct extensions of the Beverley palaeochannel sands both south and east of the Beverley Mine ('Deep South' and 'Beverley East' discoveries).  Additionally, Heathgate affiliate Quasar Resources Pty Ltd has reported high-grade uranium intercepts at the Beverley Four Mile discovery (a JV with Alliance Resources Limited) in a possible roll front style deposit located close to the foot of the range, west of the Beverley mine, whilst Australia's fourth uranium mine is being developed at Honeymoon further south in the Frome Basin, and hard rock uranium resources have been reported at Mt Gee and Crockers Well in the Proterozoic basement rocks.

Heathgate has informed the Company of significant uranium intersections along the range front in the north west corner of tenement EL 3002 North Mulga, around 12 kilometres north of the Beverley mine in an area considered prospective for both 'Beverley' and 'Four Mile' style mineralisation.  Several holes have reported anomalous gamma intercepts. December 2006 hole NM035 intersected two zones of uranium enriched sands in a similar stratigraphic sequence to that hosting mineralisation at the nearby Beverley mine, including a best result of 4 metres @ 0.055 % pU3O8 (from 166 to 170 metres), and an upper zone of 2 metres @ 0.039 % pU3O8 (from 159 to 161 metres).   Follow up intersections reported in July 2007 include 2.0 metres @ 0.14 % eU3O8 from 160.5 metres, and a further 1.0 metre @ 0.07% eU3O8 from 170.5 metres in hole NM051, and 0.5 metre @ 0.09% eU3O8 from 160.0 metres in hole NM049. 

Heathgate reports that the next stage for this project will be to plan a series of drill hole traverses across the area to gain a better understanding of the geology and extent of uranium mineralisation. 

As shown in the figure below, Giralia's tenements cover around 45 kilometres of strike of the range front marking the edge of Proterozoic basement outcrop both north and south of the Beverley Four Mile discovery, along with the direct extensions of the Beverley East and Deep South deposits. Heathgate has recently extended its mineral production leases at Beverley to the east and south to now directly adjoin Giralia's tenements.